STAND. COM. REP. NO. 718-26

Honolulu, Hawaii

, 2026

RE: H.B. No. 1741

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Water & Land, to which was referred H.B. No. 1741, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Deem a county inclusionary mandate as a form of development exaction and treats the mandate as a housing affordability impact fee, with certain exemptions;

(2) Prohibit a county from adopting, amending, or enforcing an inclusionary mandate or inclusionary mandates for residential or mixed-use development, under certain circumstances;

(3) Establish additional requirements for a needs assessment study for a county-imposed inclusionary mandate; and

(4) Establish a criterion that allows luxury residential projects or projects that receive certain discretionary value increases to be subject to inclusionary mandates.

Your Committee received testimony in support of this measure from Hawaiʻi YIMBY; Grassroot Institute of Hawaii; Housing Hawaiʻi's Future; Hawaii Appleseed Center for Law & Economic Justice; and three individuals.

Your Committee finds that this measure would require the counties to conduct a study analyzing the costs of mandating that housing projects include a certain amount of affordable housing as a condition of permit approval before imposing such a requirement. If the study found that the requirement would increase the cost of market-rate housing, the county would not be allowed to enforce inclusionary zoning unless it provided incentives to offset all of the costs associated with it. Your Committee further finds that this measure is a prudent approach to dealing with affordable housing mandates that have been shown to actually stifle homebuilding.

As affirmed by the record of votes of the members of your Committee on Water & Land that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1741, H.D. 1, and recommends that it be referred to your Committee on Judiciary & Hawaiian Affairs.

Respectfully submitted on behalf of the members of the Committee on Water & Land,

____________________________

MARK J. HASHEM, Chair